Informed member consent is essential for oppression petitions; bare signatures on unexplained sheets do not satisfy statutory support.

A petition under Sections 397 and 398 was held not maintainable because the petitioners failed to show valid, informed consent in writing from the requisite number of members under Section 399 at the time of filing. Several consents were excluded as invalid, including those from non-members, later inductees, duplicate or unsigned forms, disputed denials, and signatures not shown to be authorised. The remaining sheets, apart from the first, did not show that the signatories had applied their minds to the proposed petition or reliefs sought. Bare signatures on unexplained sheets were insufficient to satisfy the statutory support requirement.

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Issues: Whether the company petition was maintainable in the absence of valid consent from not less than one-fifth of the total number of members as required for invoking the remedy under Sections 397 and 398 of the Companies Act, 1956.

Analysis: The statutory scheme under Section 399 requires the requisite numerical support to exist at the time of filing. On the facts accepted by the parties, the effective strength of members was taken at 1421, so 284 members constituted one-fifth and 281 valid consents were needed in addition to the three petitioners. From the 318 consents produced, several were excluded as invalid because they related to persons who were not members, members inducted after the relevant date, duplicate signatures, unsigned consents, disputed denials of consent, and signatures not shown to have been authorised by the concerned members. The remaining consent sheets, other than the first sheet, did not disclose that the signatories had applied their minds to the proposed petition or to the reliefs sought. A bare signature on separate sheets, without indication of the purpose of consent, did not amount to consent in writing. The directory nature of the filing requirements did not dispense with the need to show that the petitioners represented the requisite body of members.

Conclusion: The petitioners did not establish valid consent from the number required by Section 399, and the company petition was not maintainable.

Final Conclusion: The application succeeded at the threshold and the main oppression and mismanagement petition could not be entertained.

Ratio Decidendi: For a petition under Sections 397 and 398, the statutory support under Section 399 must be demonstrated by valid, informed consent in writing from the requisite number of members at the time of filing; a mere array of signatures on blank or unexplained sheets is insufficient.

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